(1888PressRelease)
May 17, 2007 - Last year, nearly £7 billion was spent on German property by foreign buyers, spread across both the commercial and residential sectors, but mostly concentrated in the latter due to the fact that a very high proportion of the German population rent their homes.
According to Dominic Farrell of Jet to Let magazine, Germany represents a "sleeping giant", with excellent opportunities for the medium to long-term investor. The domestic financial services industry is opening up to foreign investors, for instance by increasing loan-to-value mortgage lending. In addition the interest rate, at 5.2 per cent, is below the current base rate in the UK. According to Mr Farrell, a German investment "will bear fruit for those looking to add solid blue-chip performance to their portfolio."
As the capital city, and cultural and economic centre of the country, Berlin attracts much of the outside investor interest. Compared to other capital cities in Europe, Berlin has very cheap property prices. For example, a one bedroom apartment is available for around £53,000, while a three bedroom version will cost somewhere in the region of £127,000. One German property developer was recently advertising Berlin apartments that already had sitting tenants for between £35,500 and £43,750.
These are the kind of prices that have not been seen for a decade or more in London. The UK department of Communities and Local Government yesterday announced that the average semi-detached house in Britain now costs £206,000, something which places Berlin property prices into perspective. And it isn't just British investors that are becoming increasingly interested in Germany. Capital is flowing in from all around Europe, while American buyers are also being prompted to give consideration to the market.
For example, a recent article in the Boston Globe told readers of a "hyper active" property market in the city. One local property auctioneer, Hans Peter Plettner, was quoted as saying: "The scent is out to buy in Berlin.
The real estate prices in the city are lower than in Budapest and Prague.
That's strange but true. Berlin is being marketed and it's on everyone's tongue - it's the talk of the west".
